Did the Other Shoe Just Drop? Chinese are Buying English Word Domains Too

Raymond published a post today on TheDomains.com, on the sales report from the first ever live domain auction at the Chinese Domain Festival and China Digital Asset Investment Summit which generated some 150 million RMB in sales.

The official exchange rate is 1 RMB is equal to $.15 USD so the live auction generated $22.5 Million in sales.

For me the biggest news out of the auction is that the Chinese appear now to be buying English words, not just letters, numbers and Chinese words.

Here are a few sales that Raymond noted:

House.com sold for 16,200,000 RMB which is almost $2.5 Million USD, the domain has a Estibot of over $1.8 Million

Banana.com sold for a whopping 13,200,000 RMB which is $2,036,000 in USD, which had an Estibot of under $600K.

Girl.com sold for 2.2 RMB which is around $400K and has an Estibot.com at $1,000,000

If the Chinese start buying English one word .com’s for premium dollars, well that’s a game changer.

It’s also really interesting to note that two of the domain names that Nat Cohen’s Telepathy purchased this week from the MostWantedDomain.com portfolio from Godaddy/Afternic.com sold as well in the auction.

CTX.com sold for 580,000 RMB which is just under 90K and WRJ.com sold for 610,000 RMB which is around $95K.

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

Premium domains and physical gold have been flowing from west to east for several years now

The falling price of “paper” gold seems to be pushing Chinese investors further into premium .coms, as domain name prices cannot be manipulated down via paper futures/derivatives selling.

There are a lot of long time domain investors who believe we are in a bubble. I think we are still in the early stages of a bull market for true premium .coms that Chinese and foreign investors can easily translate into a common product or meaning.

It makes sense that Chinese buyers focus on English keywords if they have any desire to operate outside the Chinese market. On another note, Chinese investors are one of the most prolific buyers of real estate in the greater Miami area.

honestly this is still peanuts
you could buy 2,000 names for $1 million each
and it would only be $2 billion dollars

by comparison, alibaba’s market cap is over 200 billion, with a B.
they could spend $2 billion buying out every domainer in the universe
and it wouldn’t even represent 1% of their companies market capitalization.

so in the big picture,
all of these one and two million dollar transactions added up are still small by any macro economic comparison
all of this buying could literally be from just one or two companies so far.

right.
less than one percent of one Chinese company’s market cap could pretty much buy
every domainer portfolio out there. And how many other chinese companies
could do that? lots of them.

a couple billion dollars.
to pretty much own the internet, all available branding, like real estate for future development.

think how much pressure that would put on new ventures
trying to compete, when all available domain brands are taken to china.

not to mention owing all the names does still mean owning a lot of traffic.
if the app universe does not displace the web, which it no longer looks like it will
then someone is making a strategic decision, to buy up all undeveloped property.

kinda of like when the US bought Alaska for $7.2 million from Russia,
and the Louisiana purchase for $15 million from France, and pretty much bought the land for 13 more states .

Buy all the land.
Figure out how to use it later.
Someone is doing it now.

And a lot of US companies
are going to be left behind.
google could have done it, or facebook, or apple.
but they didn’t.

but leave it to the chinese to figure it out.
and a few years from now,
we’ll find out what happened to ecommerce
on the web and on your phone.

I’ve been saying this for some time. The best golfer or basketball player (with a limited lifespan) is worth a billion dollars these days. What are the best domain portfolios worth? Surely its more than we think. Domain names relate to most things virtual and for the future. The sky is the limit to one’s perception.

As soon as a someone like Carlos Slim spends $500mm on a stellar portfolio, it immediately becomes worth a least that much. Many cannot figure out how a painting is worth $200mm but if you understood the logic in the art world, you start to understand what value is. I believe it has more to do with investment than art.

Why does someone pay $3mm for a car when a similar $30k car will drive you to the same location? Its perception. I perceive my portfolio to be worth over a billion. Here is an older The Domains article where I explain why. Most will think I’m over the top on price but believe I’m well positioned for the near future.

When more end-users start to see why I’m bullish on domain names, it will make all portfolios and extensions worth more. People (at least in China) are starting to see that value more as a currency and investment. I haven’t received a billion dollar offer yet, but those with prime domain portfolios should hang on to them into 2016. It’s going to get interesting.

Michael-you’re one person that domainers listen to and it’s interesting that you also mentioned “all extensions”. I’m assuming you mean keywords in those extensions and even if you sell for $1Billion ( I hope you do) the nature of the beast is that you’ll keep buying,not go play golf for the rest of your life. When you do hopefully you’ll share some of those new extension names here on Michael’s blog. Happy Holidays.

Horrible mistake to release tht 2% stake at $1 million. Great decision to give 2% of the company to acquire Uber.com. This allowed Uber to move away from their previous name, which was unacceptable in SF at the time.

Biggest gain for Uber was reclaiming that 2% share. It will be worth $3-$4 billion in the next few years.

IMO, that 2% stake is worth far more than the best domain portfolio in the world. No renewal fees. Can be sold in the future. Easily recognizable.

Agree. Premium domains are undervalued because the active buyer pool remains tiny relative to the number of people worldwide who ought to have skin in the game. Not all domains have value. And mid-grade domains will tend to be priced in the $xxx and $x,xxx range because that’s all small businesses are prepared to allocate. That won’t change much. But at the top, the sky’s the limit. Not today. Today or tomorrow, prices tend to max out where the market has already been. But the market will gradually go beyond that. Art, exotic cars, and collectibles are examples of where this market might go as it matures.

Right now, domains are undervalued enough that individuals with relatively little to spend can buy up more valuable assets in this sector than they could in just about any other market. We’re still in a period where individuals bid against individuals … not just individuals versus large companies. Competitive though prices are, they’re still within range. So we can pass right under the nose of well funded organizations and snag what we want before they wake up.

The thing is, I don’t want the market to mature today. I want it to mature 5+ years from now. Guys like Michael Castello and Rick Schwartz have already assembled their premium portfolios. But many of us arrived much later and have far less spending power. We need time to buy before the door slams shut.

“I haven’t received a billion dollar offer yet, but those with prime domain portfolios should hang on to them into 2016. It’s going to get interesting.”

I think you should only speak for yourself and not advice others on what to do with their portfolio. Other seasoned domainers have displayed solid strategy in getting the best dollars for their prime keyword .com domains, individually, as competition stiffens with the introduction of new domains.

Your $1.2 billion dreamland portfolio sale strategy in the 2014 report is flawed, and has been ridiculed even by seasoned domainers with more valuable prime domains.

That being said, Rick probably would have sold Whisky.com for over $8million, not $3M. That’s the type of strategic domainers many admire and would love to emulate. Not grouping 30 subpar domains with 11 good ones and hoping to dump all 41 to one buyer for billions.

The question now is, why sell whisky.com for $3m, but daydreaming to get $30m for weak domains like kingtut, greatgasby ?

Posts like this is exactly why Michael and his brother will get $1billion offer-it’s just a matter of time. I assume you know that they TURNED DOWN $5 million for PalmSprings.com alone? Happy Holidays!

The real test will be what becomes of domain purchases like Banana.com for $2 million. Will it launch as a brand? In that case, English domains may have a retail market in China. If the buyer is a speculator aiming to flip, then that’s a very different story. Either way, very interesting.

I believe more money will be made in the domain market in the next 24 months that the past 20 years combined. China is moving into different areas and not just numbers or llll. They are not selling the domains they own. Every try and buy one from a domain owner in China, good luck.

This will create a higher demand for years to come.

Companies in the US for years have lagged on buying up these generic names from domain owners, now the real pressure comes of US companies to pony up$$ for a name.

Real competition will start to come now. This will be sellers market for a long time. The biggest wave of buyers has yet to even hit. They want to do business in the US and you can’t do it with out a great domain name. Made up names will not cut it. Anything generic is going to skyrocket.

Revenue names that get type in traffic will go to the moon.
Of course it all could go to zero and the internet names could be worthless but I doubt it.

The Chinese have been driving the global art market.
And the global art market is a $65 billion dollar market. Each year.
They’re paying 10s of millions of dollars for a single piece of art.
Or more.
A chinese buyer paid $170 million for a single painting just last month.
Modigliani. Do a search.
Investing in scarcity. One of a kind.
And a domain you can monetize, build a business on.
Its one of a kind.
A painting just hangs on the wall.

The dollar volume so far here is still quite tiny.
Not even a few paintings worth all year.
This hasn’t even gotten started.

According to a recent report, there are 4,000 start-ups every day in China. So anything can happen with regard to domains in China. Why wouldn’t they want keyword domains? There is no question about the inherent value of keyword domains. IMHO, they will turn their attention to some of the good new GTLDS such as LAND, HOUSE, etc as well some day.

the new GTLDs are awful excess supply foisted on the market that have served to only muddy the waters and delay the ascension of .com to its rightful status. But make no mistake…..that day IS coming and the new G;s will look like the mangled stillborn joke they truly are. I cant keep all the extensions in my head and this it becomes near impossible to remember a name…and uh…that’s kinda important,

This is all related to what is happening to the Chinese currency where the Chinese govt is determined to keep their exports cheap. The wealthy are diversifying into more international assets to protect their wealth from sitting in China and getting devalued.

I also would like to know the answer to Bill Kara’s question. Where is best to list those premium one word generic domains so those chinese buyers have the best chance of seeing them without being first to contact those buyers?

Funny I was just posting about .GOLD and China over at DI. This is what I wrote:

“I really like .gold. It has that special desirability and “cool” factor. It’s also not for nothing that the “gold” analogy is so often applied to domains. It’s a shame it has so few regs. The reason is obvious, however, i.e. the high basic reg price. If it weren’t for that high price, .gold would probably get quite a lot of new regs.

Also, China is the world’s largest producer of gold, the world’s largest consumer of gold, they just joined the World Gold Council (that was a major big development), and they will likely dominate the entire global gold market before long. The Shanghai Gold Exchange is also the largest physical bullion marketplace in the world as well.”

Michael I also noticed you snapped up at least one nice .gold yourself during EAP which would normally have cost people around $3,000 then. Definitely a nice one.